The economy at the end of last year contracted at a far faster rate than initially estimated, a government report released Friday said.

….Output fell 6.2 percent at an annualized rate in the fourth quarter of 2008, revised downward from a previous estimate of a 3.8 percent decline. The drop was even steeper than many economists had feared — the consensus estimate had been a 5.4 percent decline — and was much lower than the 0.5 percent contraction from the previous quarter.

That’s an enormous revision. I wonder how Commerce screwed up so badly?

Apparently the answer is that they miscounted business inventories. No telling how. But the good news, such as it is, is that this means inventories are lower than we thought. And since inventory overhang keeps businesses from ordering more stuff, the lower number means that maybe things will pick up slightly more than we expect this quarter. Maybe.